3 Warning Signs That Bitcoin’s Rise Is Exceeding Its Limit

Bitcoin (BTC) faced fresh doubts about the strength of its bullish rally on October 7 as analysts looked for a possible reversal of short-term pressure on Wednesday.

BTC/USD 1-hour candlestick chart (Bitstamp). Source: TradingView

Funding rates in the red

info from Cointelegraph Markets Pro And TradingView BTC/USD hovered around $54,000 after failing to establish support at the $55,000 mark.

The previous day saw a sudden rise to highs of $55,700 for bitcoin, which accompanied significant buying pressure.

With funding rates turning positive across exchanges, concerns on Thursday centered on what could end up being an adverse move lower.

Funding rates that turned overly positive indicate that the market is expecting more upside and that the big value is buying Bitcoin. Under these conditions, a collective retreat from positions can accelerate and intensify a downward move, if initiated.

Bitcoin funding rates vs BTC/USD chart. Source: Bybt

The mood among investors was echoed by sentiment data, with Fear and Greed Index in Cryptography Hit 76/100 a day, which represents “extreme greed”.

“Investors are very greedy for BTC right now,” Trader and Analyst Rekt Capital warned.

Crypto Fear & Greed Index as of October 7. Source: Alternative.me

Preparing to take profits

While below $10,000 from all-time highs, Bitcoin is also facing significant resistance levels at $58,000, $60,000 and more on its way back to price discovery.

Related: Price Rising: Will Whales Offer ETF Approval for Bitcoin Futures?

As Cointelegraph mentionedOctober is set to close slightly below the highs, while November could see a return to lower levels before the end of December erasing current records.

However, long-time market participants are already recommending an exit strategy for this week, and among them is John Bollinger, the creator of the popular Bollinger Bands trading indicator.

Bollinger Bands track the ups and downs of the asset’s volatility and currently indicate that calmer conditions should prevail. However, when the bands narrow, volatility follows.

BTC/USD 1-day candle chart (Bitstamp) with Bollinger bands. Source: TradingView

Meanwhile, Altcoins are not expected to post final cycle gains until next year.